Globally, the appetite for oil remains as avaricious as it was 100 years ago. In fact, oil and gas supply the world’s seven billion people with 60 percent of their daily energy needs. In the case of Guyana, the need for oil to keep the engine of hundreds of businesses turning cannot be emphasized enough.
Even though the English speaking nation racks up billions of dollars for its fuel import bill, it appears that in the not so distant future, it is going to be a nation not only rich in water, minerals and land but also in oil and gas.
This economic forecast is fueled by rich oil finds as declared by a major US Company called Exxon Mobil. According to the American oil giant, it discovered oil-bearing rock in the Stabroek Block offshore Guyana. The United States-based oil company said its Liza-1 well has encountered more than 295 feet of high quality, oil bearing sandstone reservoirs. The well is the first on the 6.6 million acre Stabroek Block and has been drilled to 17,825 feet. It was drilled by Exxon Mobil’s local subsidiary, Esso Exploration and Production Guyana Ltd.
Esso Exploration and Production Guyana Ltd. has a 45 per cent interest in the block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Ltd. holds 25 percent interest.
The oil company has made progress amid the border controversy between Guyana and Venezuela, where the latter remains adamant that the area where the US Company is drilling is within its territory.
Since the significant oil find, more than 18 major companies regionally and internationally have since expressed a strong interest in investing in the sector, and hundreds of skilled persons in the area are on the hunt for opportunities to work in Guyana’s oil rich shores.
HOW GUYANA IS PREPARING FOR THE SECTOR
To prepare for the riches that will accrue from the oil and gas industry, otherwise known as “black gold,” Guyana is taking a number of protective measures; two of which include the creation of a Sovereign Wealth Fund and membership with the Extractive Industries Transparency Initiative (EITI).
With regard to the fund, Government is currently in the process of finalizing the legislation that will set the stage for a legally established fund that will be used to save the wealth obtained from the sector. It is to be renamed, “The Roraima Fund.”
Perhaps one of the most important measures being taken is the move to have membership with the EITI. This international body ensures that nations engage in good governance and guard against corruption that often follows with the highly affluent sector.
But acquiring membership is not as easy. Guyana is required to go through a number of stages before it can be accepted. However, that process has already started.
Minister of Natural Resources, Raphael Trotman recently reported on the stage at which the nation is in the EITI membership process.
Trotman was careful to note that the EITI standard contains the set of requirements that countries need to meet in order to be considered as, first, an EITI Candidate and in the end, as one of the 51 EITI countries compliant with the EITI requirements.
He explained that the standard is overseen by the international EITI Board, with members from governments, companies and civil society.
He said, “As per EITI Requirement 1 of the EITI Standard, the Ministry of Natural Resources has been identified by Cabinet as the Lead Agency responsible for implementing the Guyana-EITI (G-EITI). The G-EITI MSG consisting of four representatives each from the Government, Industry and Civil Society.”
The Natural Resources Minister said, “We’ve had some delays in terms of having the nomination process for the sectors concluded in time for us to reach our November 2016 deadline. This process is now completed and I can now report that the Industry and Civil Society Representatives were independently appointed by their respective stakeholder groups. The National Secretariat for the MSG will be managed by the Ministry of Natural Resources and its responsibilities encompass conceptual and organizational support for the Multi Stakeholder Group in order to ensure the successful implementation of all EITI requirements.”
The Natural Resources Minister said that the Secretariat will serve a municipal relations purpose, encouraging contact with the EITI International Secretariat, in Oslo, Norway, as well as associate EITI Secretariats.
He noted that the Secretariat will be managed by the National Coordinator. In his speech to members of an important gala, he stated that the Government has initiated the process of addressing the staffing requirements of the National Secretariat.
Trotman said that a Legal Officer was contracted and the Government is still in the process of appointing the National Coordinator and working out capacity building initiatives with the International Secretariat.
“It is worthy to note that many of the critical decisions that are to be made, such as which extractive sector Guyana will focus upon in its initial years of reporting, will be made within the tripartite MSG. Its role is not superficial but tremendously integral to the success or failure of the EITI process,” expressed the Minister.
He said that the experience of getting to this juncture has confirmed the worth of this scheme in bringing sectors and seemingly dissimilar parts and people as one and the power of teamwork.
Trotman said that the level of discussions of the tripartite body has already been rich with ideas for sector development and for making the process of EITI successful.
He said, too, that this level of commitment and the recognized value of the process of applying for EITI candidacy, in terms of the transparent process for the choosing of representatives of each sector, has been rewarding for this government which has committed to greater transparency and accountability.
The Minister stressed that the task ahead, while challenging, due mainly to limitations in the current data collection systems, is one that the Government eagerly anticipates and the goal remains for it to submit an application for candidacy before the end of 2016.
He noted that support to enable the success of the process is being received through capacity building support from the Carter Centre and the EITI Secretariat.
“Our Caricom neighbour, Trinidad and Tobago, has been playing a particularly supportive role and has been invaluable in getting us to this point. We are ready for the challenges that will come with transparency and are comforted by the fact that in this EITI system, Government is not alone and is ably supported by civil society and industry. The road ahead is lengthy, and we have taken the first steps and are well on our way,” the Minister noted.